What Democrats did wrong on the debt ceiling in 2010 [View All]

http://www.washingtonpost.com/blogs/ezra-klein/post/what-democrats-did-wrong-on-the-debt-ceiling-in-2010/2011/07/11/gIQA3uWFbI_blog.html

Felix Salmon writes that since Republicans could never have agreed to a grand bargain that included taxes, “there was no point even trying to construct one.” The cost of that mistake, Salmon says, “is going to be enormous ... I can’t help but draw some kind of causal connection between Treasury’s oversized ambitions and the current mess.” Brad DeLong agrees. He calls it the White House’s “greatest unforced error.”

...But there was a moment when Democrats did have the leverage: December 2010. The election was over. Nancy Pelosi was still speaker of the House. Harry Reid still had 59 Democrats in the Senate. The Bush tax cuts were expiring. And Democrats had a perfectly popular and intuitive position: Extend the cuts for the middle class but, in a time of deficits and sacrifice, sunset the cuts for the rich.

...But there was one thing the deal didn’t include, that many observers -- myself included -- said should have been there: an increase in the debt ceiling.

It seemed to fit. The deal was going to increase the deficit by almost a trillion dollars, so it was going to accelerate our collision with the debt ceiling. It was passed by an outgoing Congress, and it’s always easier for retiring legislators to take tough votes than it is for newly elected legislators to take them. And it would have headed off the awful choice that Democrats face this year: deep, sharp cuts that will slow the recovery, or a debt crisis that could plunge us back into recession..."